Disputed Air Force helicopter deal nears end

Disputed Air Force helicopter deal nears end

Boeing photo of an HH-47 helicopter

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By Associated Press

WASHINGTON (AP) - The Air Force is on track to select a winner this fall on a disputed $15 billion helicopter deal originally won by Boeing, despite an ongoing review by Pentagon investigators, a senior service official said Tuesday.

The Pentagon inspector general's office has been investigating whether program requirements revised by the Air Force met both its and the service's guidelines - and did not benefit any particular competitor - which could have ultimately swayed the award to Boeing Co. in 2006.

A draft of the IG's report is due out in September, but a final version will not be released until February, Air Force Maj. Gen. David "Scott" Gray told reporters at a Pentagon briefing.

The Air Force has yet to see an interim report, but Gray said no concerns have been raised during its ongoing discussions with the IG's office. If there are any questions that could delay the contract, they will be directed to acting Air Force Secretary Michael Donley and Sue Payton, the service's acquisition chief.

In November 2006, Chicago-based Boeing beat Lockheed Martin Corp. and United Technologies Corp.'s Sikorsky Aircraft for a deal to upgrade 141 Sikorsky helicopters used to recover troops caught behind enemy lines. Both losing bidders successfully protested the Air Force's decision claiming the service unfairly evaluated the bids. All three companies submitted their most recent proposals in May.

There is no point in further delaying a contract on a program needed by soldiers and airmen in current war operations, said Gray, who works in Payton's office.

But the rescue helicopter dispute is not the Air Force's only tarnished competition.

In the past year, the service has been caught in a firestorm over a highly politicized award of $35 billion contract to Northrop Grumman Corp. and Airbus parent European Aeronautic Defence and Space Co. over Boeing to replace 179 Eisenhower-era aerial refueling planes.

Defense Secretary Robert Gates last month said the Air Force would no longer oversee that competition, handing over the responsibility to Pentagon acquisition chief John Young.

Gates' decision followed a June report by the Government Accountability Office that detailed "significant errors" in how the service made its original award.

Shares of Bethesda, Md.-based Lockheed Martin dipped 43 cents to $114.82 in afternoon trading, while Boeing fell 60 cents to $63.04 and Hartford, Conn.-based United Technologies tumbled 61 cents to $65.22.

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